Trade surplus drops as eurozone crisis bites

German exports and imports fell sharply in April as Europe's biggest economy begins to feel the effects of the long-running eurozone debt crisis, data showed on Friday. Analysts said the monthly data were worse than expected.

Trade surplus drops as eurozone crisis bites
Photo: DPA

Germany exported goods worth a total €90.0 billion in seasonally-adjusted terms in April, 1.7 percent less than in March, the national statistics office Destatis said.

Imports were down even more sharply, shrinking 4.8 percent to €73.9 billion, meaning the seasonally-adjusted trade surplus increased to €16.1 billion from €14.0 billion in March.

Taking the first four months of 2012 as a whole, however, the picture was more positive, with German exports rising 5.2 percent over the year-earlier period to €363.1 billion in unadjusted terms and imports up 3.3 percent at €303.2 billion.

That meant the January-April trade surplus increased by 15.9 percent to €59.8 billion.

The release “shows that Germany is not immune to a slowdown in world trade and flagging demand from the eurozone,” said Natixis economist Constantin Wirschke.

According to Destatis, exports to Germany’s partners in the single currency area were down 3.6 percent year-on-year in April, while exports to countries outside Europe grew by 10.3 percent.

Newedge Strategy analyst Annalisa Piazza also saw the data as a “clear signal that the German economy is beginning to suffer from the effects of the current crisis.”

Foreign trade “has been one of the key factors supporting activity in the first quarter whilst today’s data cast some doubts on the future development of net exports contribution to growth,” Piazza said.

“Poor trade activity might be seen as a harbinger of moderation in the economy as a whole as demand is fading, both domestically and externally,” she concluded.


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‘Trade has collapsed’: Germany sees business with UK slump after Brexit

Germany's exports ticked up in January on robust trade with China, but trade with another key trade partner, Great Britain, plummeted after the Britain left the EU.

'Trade has collapsed': Germany sees business with UK slump after Brexit
Southampton harbour. Photo:Andrew Matthews/DPA

The Brexit fallout has continued to hurt commerce with the United Kingdom, with federal statistics office Destatis recording a 29 percent plunge in German exports across the Channel.

Meanwhile, demand for UK goods in Germany collapsed by more than 56 percent, official data showed Tuesday.

Cross-Channel exporters have had to adapt to new customs requirements from January 1, following Britain’s 2016 decision to leave the European Union.

Firms on both sides have since complained of increased bureaucracy and shipment delays as they grapple with the new rules.

BREXIT: What changes in Germany from January 2021?

“Foreign trade with Britain has collapsed,” said LBBW bank economist Jens-Oliver Niklasch.

Overall, German exports rose 1.4 percent month-on-month in seasonally adjusted figures, Destatis said.

But imports sank as coronavirus shutdowns sapped consumer demand in Europe’s top economy.

Imports slumped 4.7 percent, widening Germany’s closely-watched trade surplus to 22.2 billion euros.

Compared with a year ago, before the pandemic ravaged the global economy, exports fell 8.0 percent in January and imports almost 10 percent.

“Consumer demand fell sharply in January due to a lack of opportunities” as the government kept non-essential shops, leisure and cultural centres closed to rein in the coronavirus,  Niklasch.

But demand for “made in Germany” goods was powered by vital trade partner China, which has recovered faster from the virus shock.

Exports to European Union countries plunged six percent year-on-year, while demand for EU goods within Germany was down by almost the same.

Combined with Germany’s struggles to bring down Covid-19 infections despite months of shutdowns, “the January reading is not an indication of renewed German export strength, but rather an alarm bell for the first quarter.”